Sunday, September 27, 2020

Why do companies offer cashback?


Why do companies offer cashback?

Some decades back we all were resilient for online shopping or any transaction. We were afraid of losing money or have a fear that we would get bluffed. 

But as we move forward to the digitization with various perks we got boosted for online shopping and demonetization helps us for cashless transaction.
Now whether its festive seasons or seasonal change e-commerce sites get flooded with sales and different offers. 
                          
One of the most promotional strategies is cashback. But like me do you also wonder why a company would be giving such an offer?? Am I getting paid more? Is it just stock clearance? Or they have some quality problem or they just want subscriptions where they promote unwanted products and services?  Hold on!! Before we all get jargoned up with such thoughts let’s explore what exactly it is? And why companies would pay us for our purchase? is it really making me save? Let’s solve step by step 

What is cashback?

As the name suggests when we purchase any product or service some amount gets refunded or rather rewarded into our account, it’s kind of perk we get for purchase.
This cashback is in form of percentage over product are services where the amount gets transferred into your wallet after our transaction get completed.
                                                    
We can redeem these cashback in many ways either it gets deposited in saving accounts. Add as credit point, use it for next shopping, do some charity or utilize as gift card or credit card points.
           
There are various cashback sites or apps through which you can avail it. Whether its grocery, travel, bills, monthly payments, or medicines you can have those much needed extra savings. Cashback offers and its percentage vary accordingly. Also, these offers have some time limits and differ product-wise. 

We may think of cashback are like discounts. Why wouldn’t they give discount instead of cashback it's one & the same? Why pay a full price and then a refund??  It’s not like that. Absolutely not!!! Cashback is not given by retailers they are given by cashback site or. The medium through which we are buying their products and services of retailers.

How is it useful for companies?? 

Now we understood that cashback is given by cashback sites, not by retailers. But how these companies make money by offering cashback?

This online shopping world has ample have competition, they never know how simply any customer would go to another retailer to buy stuff, so how to maintain loyalty with the customer as well how to bring more new buyers. Here these cashback sites play the role.

It’s nothing but kind of affiliate marketing. Where these sites promote products and services of retailers and when a customer ends up buying they get a commission for it. So through this commission, some amount gets back to us as a reward as promised while shopping. 

In this era of 2020 for a successful business, every retailer uses this affiliate technique as it increases sale performance plus maintain loyal customers, increase the lead and targeted traffic increase network of new buyers.

How we as customers get benefit through it?

Earlier we all talk about how it works for retailers and cashback sites and what exactly it us but we all must have question popping up in the head.

How I am getting benefit through It.??

So when we have any purchase in mind we surf through different options and scrutinizing and comparing manually we make the final choice for us. But all this process is a lengthy time consuming and complex. What if just one platform providing us varieties of options from a different e-commerce site. Easy for us to compare and finalize.  Our money and time are saved. 

In everyday life even if it is a necessary chore or  bigger investment  we all try to shell out less and have more rather I would say the best for  us

Isn’t it great just one platform saving our money time plus we are getting a discount from retailers and plus cashback? And these sites just don’t stop here they give credit points, free subscription daily offers, easy transaction, incentives for referring a friend or just filling some survey form. A good mode of earning money. 

Whether its younger ones or adults these sites have something to offer for everyone. But yes even though it sounds great but in practice, we have to follow some steps or precautions while approaching to these cashback sites.
All of the cashback sites ask for subscriptions in the first step many of them have a free subscription. Or if you want to be a premium member for an extra reward you have to pay for it. 

These rewards or cashback have capping. They have some time limits for purchase .and time limit to redeem points. Always make sure you go through all terms and conditions. Some of us think that if I pay more I will earn more cashback. No, it’s not like that. Earning cashback you need not buy a lot. Whether you are a shopaholic or you want to buy for daily chore everyone can have the perk of cashback.

So in final words, I would say in this pandemic this online shopping is becoming boon for us from luxury to it become a necessity to have a minimum of physical contact. This health disaster-affected our economy. Our budgets are shaken a little. Every penny is counted on every expense.   

I remember my mum saying drop fills the lake, cashback is like these only which are helping us to save drop by drop.

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